Chicago, IL
Litigation Lawyer at Chicago, IL
Practice Areas: Litigation, Employment & Labor ... +13 more
OUTCOME: Affirmed on Appeal
Appeal of dissolution of marriage and judgment interpreting the parties' premarital agreement. Oral argument before the Illinois Appellate Court, First District
OUTCOME: Restrictive covenant held enforceable by Illinois Supreme Court
Description: On December 21, 2006, the Illinois Supreme Court affirmed the enforceability of reasonable restrictive covenants in physician employment contracts and expressly refused to find them to be ... against the public policy of Illinois. In a detailed opinion in the matter of Jyoti Mohanty, M.D. and Raghu Ramadurai, M.D. v. St. John Heart Clinic, S.C. and John Monteverde, M.D., No. 101251, the Court held that the employee-physicians failed to show that physician restrictive covenants are contrary to the constitution, statutes or judicial decisions of the State of Illinois or are injurious to the public welfare. Citing its long tradition of upholding such restrictive covenants, the Court noted that restrictive covenants in physician employment contracts can have a positive impact on patient care. The Court described itself as ill equipped to determine what the possible consequences might be if it were to ban all restrictive covenants in physician contracts and concluded that this issue is better left to the legislature, where the competing interests can be fully aired. The Illinois Supreme Court last addressed Illinois public policy regarding restrictive covenants in physician contracts more than 40 years ago. Since that time, changes in the medical practice environment, the prohibition of restrictive covenants among Illinois lawyers for public policy reasons, and changes in the public policies of other states regarding physician covenants, have led to uncertainty as to the continued viability of physician restrictive covenants in Illinois. The Court's decision removes this uncertainty and makes it clear that, absent contrary legislative action, restrictive covenants in physician contracts remain enforceable in Illinois, subject to the same reasonableness standards that Illinois courts have consistently applied in the past. Both employee-physicians signed employment contracts that contained covenants not to compete. Dr. Ramadurai's covenant was for three years following termination of his employment for any reason, and encompassed a two-mile radius from the Clinic; Dr. Mohanty's covenant was for five years following termination of his employment and encompassed a five-mile radius from the Clinic. Drs. Mohanty and Ramadurai, resigned from the Clinic and brought actions for declaratory judgment against Dr. Monteverde, seeking to void the noncompete covenants in their employment contracts. Dr. Monteverde countered by moving for enforcement of the covenants. Following a protracted preliminary injunction hearing, the trial court entered an order declaring the covenants overbroad and unenforceable because they restricted the employee-physicians from the practice of medicine even though the physicians were primarily engaged in the practice of cardiology. Dr. Monteverde appealed that decision, claiming that the covenants were narrowly drawn and necessary to protect St. John's interests. The Appellate Court agreed with Dr. Monteverde, reversed the trial court, and held that the covenants were reasonable in scope and enforceable. Mohanty v. St. John Heart Clinic, S.C., 358 Ill. App. 3d 902, 832 N.E.2d 940 (1st Dist. 2005). The physician-employees then appealed to the Illinois Supreme Court.